2010 a record year for FDA fines, forfeitures

During fiscal year 2010 the federal government won a record $3 billion-plus in fines, forfeitures and related actions against drug firms and other FDA-regulated companies, plus more than twice as much in restitutions and profit disgorgement. In fact, since last January, the Department of Justice’s Office of Consumer Litigation, which brings cases for violations under the Food, Drug and Cosmetic Act, has successfully pursued cases resulting in 25 criminal convictions, it says. The cases involved such matters as the unlawful marketing of drugs and devices, fraud on FDA, and adulterated product distribution.

Additionally, Justice garnered $3 billion in civil settlements and judgments in cases involving fraud against the government in FY 2010, the department says. “This includes $2.5 billion in healthcare fraud recoveries —the largest in history—and represents the second largest annual recovery of civil fraud claims,” it says.

“Moreover, amounts recovered under the False Claims Act since January 2009 have eclipsed any previous two-year period with $5.4 billion in taxpayer dollars returned to federal programs and the Treasury. Recoveries since 1986, when Congress substantially strengthened the civil False Claims Act, now total more than $27 billion.” Most of the cases resulting in recoveries were whistleblower actions under the False Claims Act, Justice says. “Of the $3 billion in settlements and judgments obtained in fiscal year 2010, over $2.3 billion was recovered in lawsuits filed under the False Claims Act’s qui tam provisions. Under these provisions, whistleblowers (known as “relators”) — many of whom face considerable personal risk in coming forward with allegations of fraud — are entitled to recover between 15 and 30% of the proceeds of a successful suit. In fiscal year 2010, relators were awarded $385 million. Since 1986, when the qui tam provisions were strengthened by Congress, recoveries in qui tam cases have exceeded $18 billion, and relators have obtained more than $2.8 billion in awards.”